The Kansas City industrial market continues to be an incredibly strong performer. At the end of the third quarter of 2014, the industrial vacancy rate stood at a tight 6.1 percent. Absorption totaled more than 2.5 million square feet during the first nine months of the year, while new deliveries were slightly over 2.6 million square feet in the same period. Let’s examine some contributing factors that are encouraging new deliveries while still driving vacancy rates down and absorption up. Spec Is King The biggest story in the Kansas City industrial real estate market during the first three quarters of 2014 was the delivery of over 2.5 million square feet of Class A distribution facilities on a speculative basis. It can be argued that, in the past, many prospective tenants considered locating a distribution center in Kansas City, but they ultimately selected a different market based on a lack of available inventory and the inability of some companies to wait on the extended timetable for a build-to-suit project. Developers that took notice of this trend and reacted by delivering space to the local market are currently being rewarded for their actions. Much of the speculative development in 2014 centered around …
EDEN PRAIRIE, MINN. — Marcus & Millichap has arranged the $5.9 million sale of Southwest Station, a 14,031-square-foot retail property located in Eden Prairie. The property is located at 13300 Technology Drive. Built in 2004, the property is fully occupied with five tenants. Cory Villaume, Sean Doyle and Brian Klancke of Marcus & Millichap’s Minneapolis office represented the undisclosed seller and buyer in the transaction.
LEAGUE CITY, TEXAS — NewQuest Properties will begin this year on Marketplace at Ninety-Six, a 36-acre retail development in League City featuring a 123,000-square-foot Kroger Marketplace as well as several pad sites and 25,000 square feet of retail space. The project is set for completion in early 2016. There are more than 6,000 homes within the immediate area, with nearby residential communities including Brittany Lakes, Brittany Bay, Sedona, Westover Park and Magnolia Creek. The development is located less than half a mile from I-45.
HOUSTON — Carroll Organization has arranged the sale of ARIUM Westheimer and ARIUM Westheimer Villas. The properties are located at 13099 Westheimer Road and 2727 Synott Road in Houston. Carroll acquired the properties in 2013 with plans to implement a value-add renovation plan and streamline management operations. The two properties were built in 2006 and 2009 and are located within a block of the southern boundary of Houston’s Energy Corridor. The corridor includes more than 18 million square feet of office space, 1.4 million square feet of retail and 1.4 million square feet of industrial space. Each complex spans 330 units.
FREELAND, MICH. — The Boulder Group has arranged the $2.6 million sale of a single-tenant FedEx property located at 8273 Garfield Road in Freeland. The 27,000-square-foot FedEx was built in 1991. FedEx is located along Garfield Road, the main thoroughfare between the MBS Airport Terminal and US-10. The property includes 4,000 square feet of office space and 23,000 square feet of warehouse/distribution space with 16-foot clear height ceilings. FedEx has 11 years remaining on their lease, which expires June 30, 2026. Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller, a Midwest-based private real estate investor. A Florida-based private investor purchased the property.
AUSTIN, TEXAS — Independence Realty Trust Inc. has acquired an apartment complex in Austin for $35.3 million. IRT used $26.7 million of cash and issued operating partnership common units valued at $8.6 million to acquire the complex. RAIT Presidential will provide property management services. The 300-unit apartment complex was built in 2001 and 2002 and has an average unit size of 1,055 square feet. The property was 96 percent occupied at the time of sale with an average effective rent per occupied unit of $1,146.
SAN ANTONIO — HFF has arranged the sale of Highpoint Towers, two 11-story office towers totaling 301,118 square feet adjacent to the South Texas Medical Center in San Antonio. HFF marketed the property on behalf of the seller, DNA Partners. Highpoint Towers is situated on a 13-acre site at 8401 and 8515 Datapoint Drive, which is accessible from I-10, Loop 410 and Loop 1604. The assets are located in the northwest office submarket and include views of the San Antonio skyline and hill country. The new ownership plans to make renovations to the project including upgrading the lobbies, adding exterior aesthetics, elevators and bathrooms. John Taylor, Kelsey Roop, Patrick McCord and Ryan McBride led the HFF sales team representing the seller.
BROOKFIELD, WIS. — Mid-America Real Estate Corp.’s Investment Sales team has brokered the $1.7 million sale of a 4,991-square-foot, multitenant retail building in Brookfield. A private investor purchased the property located within Underwood Crossings, a 175,000-square-foot retail center. The development is located at the southeast corner of Bluemound Road and Columbia Drive approximately 12 miles west of downtown Milwaukee. The subject building features a Starbucks, Great Clips and T-Mobile. Target, Trader Joe’s and PNC Bank shadow anchor the property. Carly Gallagher of Mid-America and Dan Cohen of Mid-America Real Estate – Wisconsin LLC brokered the transaction on behalf of Minneapolis-based Ryan Cos. US Inc.
ANN ARBOR, MICH. — Colliers International Ann Arbor and Wickfield Properties have arranged the lease of 134,927 square feet of office space in Ann Arbor. Truven Health Analytics will occupy space in the Wickfield Center located at 100 Phoenix Drive. The company is relocating its North American headquarters in Ann Arbor to the center and will employ approximately 850 people at the campus. The property previously served as the former Borders Books corporate headquarters before Colliers International sold it to Ann Arbor-based Wickfield Properties in 2013. Jim Chaconas and Brendan Cavender of Colliers International Ann Arbor are directing leasing and marketing efforts for the Wickfield Center.
NEW YORK CITY — New York City-based Savanna has partnered with Hornig Capital Partners and Chelsea Village Associates to acquire 95 Evergreen Ave. in the Bushwick neighborhood of Brooklyn for an undisclosed price. The five-story, 165,000-square-foot industrial building is located on the southeastern corner of Evergreen Avenue and George Street. Originally built as the Schlitz Brewery, the property features 15,500- to 36,600-square-foot floor plates, 15- to 30-foot ceiling heights and large windows with direct views of Manhattan and the surrounding boroughs. The joint venture plans to launch a $20 million building-wide capital improvement program in the first quarter of 2015 to convert the property into an office and retail location. Renovations include upgrading the property’s façade, windows, roof, generator, elevators, electric and plumbing systems, fire alarms, sprinklers and HVAC systems. The new space will cater to creative, media and technology tenants. Joe Berko and Lee Slipe of Berko & Associates represented the undisclosed seller in the transaction.